Statement 1: Budget Overview (Continued)
Improving the integrity and fairness of the tax system — tax reform
The Government has built on the Stronger, Fairer, Simpler package to continue the process of tax reform, including by:
- reforming the statutory formula for valuing car fringe benefits by introducing a single statutory rate that applies regardless of distance travelled so as to remove the tax incentive for people to travel longer distances, using more fuel;
- allowing investors in infrastructure projects of national significance to get full tax value for their investments;
- phasing out the Dependant Spouse Tax Offset and replacing the Entrepreneurs' Tax Offset with a small business tax package including a new $5,000 immediate deduction for motor vehicles, reducing complexity and improving incentives;
- providing more timely tax relief to working families by ensuring the Low Income Tax Offset reduces their tax liabilities through the year, when they need it;
- reforming access to the Low Income Tax Offset for unearned income of minors, to remove the incentive for income splitting, such as through trusts which direct income from parents on high marginal tax rates to their children; and
- reforming family payments to better reflect the costs of children and reduce overlap between family payments and income support for young people.
Since the 2010‑11 Budget, the Government has announced a further 12 measures that deliver on reform directions identified in the Australia's Future Tax System review.
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